Federal Historic Tax Credit Program
The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation’s most successful and cost-effective community revitalization programs. It has leveraged over $102.64 billion in private investment to preserve 45,383 historic properties since 1976. The National Park Service and the Internal Revenue Service administer the program in partnership with State Historic Preservation Offices.
via the National Park Service
20% Tax Credit
Buildings deemed “certified historic structures” through the National Park Service, i.e. listing on the National Register of historic places are eligible to receive a 20% income tax credit for historic rehabilitation. The Missouri State Historic Preservation Office along with the National Park service review rehabilitation work to ensure it complies with the Secretary of Interior Standards for Rehabilitation. This is a great program that ensures our historic buildings are not only saved, but retain their historic character as well.
When can Federal Historic Tax Credits be applied?
The federal credits are limited to income-producing, depreciable property only. The property may be either commercial or residential rental property that is certified historic. A taxpayer’s personal residence would not qualify for the federal credit. (The 20% credit is available for properties rehabilitated for commercial, industrial, agricultural, or rental residential purposes, but it is not available for properties used exclusively as the owner’s private residence). Information via the Missouri Department of Natural Resources.
Over the life of the program, the historic rehabilitation tax credit (HTC) has:
- created nearly 2.5 million good paying, local jobs;
- leveraged more than $117 billion in private investment in our communities;
- generated a significant return on investment for the federal government;
- and preserved more than 40,000 buildings that form the historic fabric of our nation.
The federal HTC is a good investment for local communities, individual states, and the nation. The cumulative impacts of the program to date (FY 1978-FY 2017) support this conclusion (p5)
- An inflation-adjusted (2017 dollars) $27.5 billion HTC cost encouraged a five times greater amount of historic rehabilitation, $144.6 billion.
- 107,000 new jobs created and billions of dollars in total (direct and secondary) economic gains.
- The cumulative positive impacts on the national economy included $12.2 billion in output, $6.2 billion in GDP, $4.6 billion in income, and $1.7 billion in taxes, including $1.1 billion in Federal tax receipts.
- The leverage and multiplier effects noted above support the argument that the federal HTC is a strategic investment that works.